Don't worry about the CPT and Taxonomy, I can see how to do that myself.

My real need however, is for enhanced image functionality (drag, drop, upload, crop, preview, save as featured image), but I don't think that is on your radar yet for this plugin.

Here is some hopefully valuable feedback:

I love your options page, but it should have a button to reset to default now, not just when reactivated.

I know its a bit complicated but there should be a specific error message for each failed input, like it took me a long time to realize that my image was too big. I thought the plugin was broken.

Where exactly is the image supposed to show up? Even when a user submits a post, the moderator still has to go into the media library and guess where the user wanted to place the image. But I guess that level of functionality (contributors) is already built in on the admin side.